New £100 million rescue package for firms hit by Carillion collapse

Contractors hit by the collapse of Carillion will be able to apply for government-backed loans as part of a £100 million rescue package.

By The Newsroom
Saturday, 3rd February 2018, 7:31 am
Updated Saturday, 3rd February 2018, 7:46 am
Carillion went into liquidation last month (photo: Joe Giddens/PA Wire)
Carillion went into liquidation last month (photo: Joe Giddens/PA Wire)

Small and medium-sized businesses and individuals owed money by the failed firm will be able to get loans from high street lenders, supported by the British Bank, business secretary Greg Clark announced.

The move comes after three high street banks agreed to provide 'tailored support' worth almost £250m to those affected by the company's collapse.

Carillion owed huge sums when it went into liquidation last month, putting thousands of jobs at risk.

It was announced yesterday that 377 Carillion staff would be made redundant, but 919 workers were saved after new employers took on their contracts.

The Government agreed to back loans so high street lenders can support Carillion contractors they might not otherwise have been able to lend to because they lack the required assets for security.

Mr Clark said: "We want to signal very clearly to small and medium-sized businesses who were owed money by Carillion that they will be supported to continue trading.

"The banks have responded to my request by agreeing to support businesses and individuals affected.

"This further guarantee will help those businesses who may not be able to provide the usual security for a loan."

The guarantees can be used to support overdraft borrowing and refinancing of existing debt, the department said.

The previous £250m support package announced by Lloyds Banking Group, HSBC and RBS had been dismissed as a 'sticking plaster' by industry representatives.

The British Business Bank is 100% owned by the Government but managed independently and specialises in providing financing for smaller businesses.

Carillion employed 250 staff at its Sheffield call centre and was also involved in the Sheffield-Rotherham tram-train project and phase two of the link road to Doncaster Sheffield Airport. It recently completed a £19m flood defence scheme along the Lower Don Valley.

The telemarketing firm Ant Marketing recently offered jobs to 20 staff at Sheffield's Carillion call centre and said it may be able to transfer a further 70.